| Accessories? Read on:
READER QUESTION:
I have a home with a legal accessory apartment. If I put my home into an irrevocable Medicaid Trust:
- Can I (or the trustee) pay the real estate taxes, homeowners’ insurance as well as maintenance, repairs, and improvements from the rental income?
- Can the rental income be deposited into a bank account in the name of the trust?
MY RESPONSE:
The way we set up these trusts is that all the income from renting your personal home (from an accessory apartment or otherwise) must be paid to you when all is said and done. Either it can be paid to you directly or it can be paid to the trust. If to the trust, then the trustee will deposit the income into a trust account, but then the trustee will write a check to you for the same amount. Either way, you get the income and you are responsible for all carrying charges on the house, including the real estate taxes, insurance, and maintenance/repairs. The trustee is not to pay these expenses.
Improvements are a different animal and will have to be handled on a case-by-case basis. If you pay for an “improvement” are you adding equity to the trust? If so, does this start a new look-back? Just something to think about and talk to us about before you make any such improvements. There may be a big difference between a repair and an improvement.
I hope this helps. |
